How to Handle a Debt That Has Been Sold to a New Collector

In the UK, creditors can sell debts they are owed to other companies. This is a lawful and regulated process. When it happens, the person who owes the money — the debtor — is not asked for their consent, and cannot prevent the sale from taking place. The debt simply moves from one owner to another.

This article explains the legal basis for debt sales, what must happen when a debt is sold, what rights remain with the debtor, and how time limits apply to the enforcement of debts in different parts of the UK.

When a debt is sold to a new collector, the debtor owes the money to the new owner, not the original creditor. The terms of the debt do not change. The new owner cannot add new contractual interest or charges beyond what the original credit agreement (or applicable law) allows. The debtor retains all the same legal rights they had before the sale, including the right to request a copy of the credit agreement and to dispute the debt. The new owner must follow the same rules as the original creditor.

The sale of a debt from one company to another is legally known as an "assignment of debt." In England and Wales, this is governed by Section 136 of the Law of Property Act 1925. The original creditor transfers its rights under the credit agreement to the new company — the debt purchaser — who then becomes the legal owner of the debt.

The debtor's consent is not required for an assignment of the creditor's rights. Most standard consumer credit agreements contain a clause that expressly permits assignment, but a debt can be assigned whether or not such a clause is present, subject to the contract terms and general law. The debtor cannot object to or stop the sale from taking place.

For the assignment to be legally effective against the debtor in England and Wales, express written notice of the assignment must be given to the debtor. This is a requirement under Section 136 of the Law of Property Act 1925. Without this written notice, the assignment still takes effect in equity, but the new owner (the assignee) may need to involve the original creditor (the assignor) in any enforcement proceedings.

There is no prescribed form for this notice, but it must be in writing. It should explain who the new owner of the debt is, identify the original creditor, include the account number, and state where payments should now be directed.

Under the Financial Conduct Authority's rules — specifically CONC 6.5.2R — where rights under a regulated credit agreement are assigned to a firm, the debtor must be notified as soon as reasonably possible, or on or before the first occasion when the arrangements for servicing the credit change. This FCA rule does not apply to agreements secured on land.

If the purchaser or collector carries on regulated debt-collection activity, it must be FCA-authorised or exempt.

Once the debt has been sold, the debtor owes the money to the new owner. The debt purchaser acquires the same rights as the original creditor — but no more than that. The debt purchaser cannot add new contractual interest or charges beyond what the original credit agreement (or applicable law) allows.

Assignment and consent

The debtor's consent is not required for an assignment of the creditor's rights. Most standard consumer credit agreements contain a clause expressly permitting assignment, but a debt can be assigned whether or not such a clause is present, subject to the contract terms and general law. The debtor is not asked to agree to the sale and cannot prevent it.

Written notice of assignment

For a legal assignment to take effect against the debtor in England and Wales, Section 136 of the Law of Property Act 1925 requires that express written notice be given to the debtor. The FCA's CONC 6.5.2R further requires that, for regulated credit agreements, notice must be given as soon as reasonably possible or when servicing arrangements change. No specific form of notice is prescribed, but it must be in writing.

Right to request a copy of the credit agreement

Under the Consumer Credit Act 1974, the debtor has a statutory right to request a copy of the executed credit agreement and a statement of account. This applies to regulated consumer credit agreements and is set out in Section 77 (fixed-sum credit), Section 78 (running-account credit), and Section 79 (hire agreements). The request must be made in writing and accompanied by a statutory fee of £1. The creditor — which, after a sale, is the debt purchaser — must respond within 12 working days. If the creditor fails to provide the agreement within that timeframe, they cannot enforce the agreement while the default continues.

Right to dispute a debt

Under FCA rules (CONC 7.5.3R), a firm must not ignore or disregard a customer's claim that a debt has been settled or is disputed. It must not continue to make demands for payment without providing clear justification and, where appropriate, evidence to support the claim. There is no statutory timeframe specified for how quickly the firm must respond to a dispute.

Limitation periods in England, Wales, and Northern Ireland

The Limitation Act 1980 sets time limits for enforcing debts through the courts. For most unsecured debts in England, Wales, and Northern Ireland, the limitation period is six years from when the cause of action accrued. The clock can restart if a payment is made or a signed written acknowledgement is given.

Once a debt becomes statute-barred — meaning the limitation period has expired — the creditor can no longer obtain a court judgment to enforce it. However, the debt still legally exists. The creditor may still contact the debtor requesting payment; they simply cannot use the courts to compel it.

Prescriptive periods in Scotland

In Scotland, the rules are different. The Prescription and Limitation (Scotland) Act 1973, as amended by the Prescription (Scotland) Act 2018, governs time limits for debts. Most debts in Scotland prescribe — meaning they are extinguished and cease to exist — after five years without a relevant claim being made or an acknowledgement being given.

There is also a 20-year long-stop prescriptive period that applies to certain debts, statutory obligations, and court decrees. Following amendments introduced by the 2018 Act (which came fully into force on 28 February 2025), this 20-year period now operates as a long-stop not capable of interruption in the usual way, subject to transitional provisions.

The five-year prescriptive period in Scotland can be extended by agreement between the parties for up to one year under section 13A of the 1973 Act (as inserted by the 2018 Act).

The distinction between England/Wales/Northern Ireland and Scotland is significant: in England, Wales, and Northern Ireland, a statute-barred debt still exists but cannot be enforced through the courts; in Scotland, a prescribed debt is extinguished entirely.

Complaints about debt collection

If a debtor has concerns about how a debt collection firm has behaved, they can complain to the Financial Ombudsman Service (FOS). The debtor must first complain to the firm directly. The FOS will consider the complaint after the firm has issued its final response or after eight weeks have passed without a final response. FOS decisions are binding on firms if the consumer accepts the decision.

Original Creditor vs. New Owner

One widespread area of confusion is the relationship between the original creditor and the debt purchaser after a sale. Once the debt has been assigned, the debtor owes the money to the new owner, not the original creditor. Any payments should be directed to the new owner, not the original company.

Changing Terms

Another source of confusion is whether the debt purchaser can change the terms of the debt. It cannot. The debt purchaser acquires only the rights that the original creditor held under the original agreement. It cannot add new contractual interest or charges that were not already provided for in that agreement or permitted by applicable law.

Notice vs. Validity

Some people assume that if they were not told about the debt being sold, the sale is invalid. While written notice is a legal requirement for the assignment to be effective against the debtor, the sale itself still takes place. Without notice, the assignment operates in equity rather than at law, which may complicate enforcement proceedings but does not cancel the debt.

CCA Request Timelines

There is also confusion about what happens when a debtor requests a copy of their credit agreement. The creditor must provide this within 12 working days of receiving the written request and the statutory £1 fee. If it fails to do so, it cannot enforce the agreement while this default continues. This right applies to regulated consumer credit agreements under the Consumer Credit Act 1974.

Statute-Barred vs. Prescribed

Finally, the difference between statute-barred debts and prescribed debts is frequently misunderstood. In England, Wales, and Northern Ireland, a statute-barred debt still exists — the creditor simply cannot use the courts to enforce it. In Scotland, a prescribed debt is extinguished entirely and no longer exists as a legal obligation.

Debts not covered by the Consumer Credit Act

The statutory right to request a copy of the credit agreement under Sections 77–79 of the Consumer Credit Act 1974 applies only to regulated consumer credit agreements. Debts that fall outside the scope of the Act — such as those arising from utilities, telecoms, council tax, or rent — do not carry the same statutory rights. For non-CCA debts, a debtor may instead use a subject access request under the Data Protection Act 2018, although different rules apply.

Council tax arrears and HMRC debts

In most cases, council tax arrears and benefit overpayments to DWP or HMRC have different time limits from standard unsecured debts and may, depending on the circumstances, be recoverable for extended periods. HMRC debts for tax or duty are specifically excluded from the Limitation Act 1980 (Section 37(2)) and have no statutory time limit.

Vulnerability protections

Some lenders follow voluntary standards — such as the Standards of Lending Practice — that include enhanced vulnerability protections. These may affect whether and how debts are sold or collected where the debtor has disclosed mental health problems or critical illness. Most major banks and credit card providers subscribe to these standards. However, this is a voluntary code, not statutory law, and its application may vary depending on the individual lender's policies.

FCA authorisation for debt collection

If a purchaser or collector carries on regulated debt-collection activity, it must be FCA-authorised or exempt. The legal assignment of a debt can occur regardless of whether the purchaser is authorised, but carrying on regulated activity without appropriate authorisation or exemption is a separate regulatory matter.

When a debt is sold, the practical experience for the debtor is that they receive a letter — the written notice of assignment — telling them that a new company now owns the debt. This letter should identify the new owner, state who the original creditor was, include the account reference, and explain where payments should be sent.

From that point, the debtor deals with the new company. The terms of the debt remain exactly as they were. The new company must follow the same regulatory rules as the original creditor, including the FCA's Consumer Credit Sourcebook (CONC), which governs debt collection activities for debts arising from regulated consumer credit agreements.

The debtor retains the right to request a copy of their credit agreement by sending a written request with a £1 fee. The debt purchaser must respond within 12 working days. The debtor also retains the right to dispute the debt, and under CONC 7.5.3R, the firm must not ignore or disregard such a dispute or continue making demands without providing clear justification or evidence.

If the debtor believes the debt may be beyond the relevant limitation or prescriptive period, the rules depend on where in the UK they are. In England, Wales, and Northern Ireland, the limitation period for most unsecured debts is six years from when the cause of action accrued, and it can restart if there is a payment or signed written acknowledgement. In Scotland, the prescriptive period is five years, after which the debt is extinguished entirely.

Debt collection is regulated activity, and the Protection from Harassment Act 1997 makes harassment by creditors unlawful.

• Assignment: The sale of debt is a lawful process. The debtor does not need to consent, and terms remain unchanged.
• Notice: Written notice of assignment must be given for the assignment to be legally effective in England and Wales.
• Rights: The debtor retains the right to request a copy of their credit agreement (for regulated agreements) and to dispute the debt.
• Limitation Periods: Limitation periods differ across the UK (6 years in E/W/NI, 5 years in Scotland).
• Regulation: Debt collection is improved regulation activity, and purchasers must be authorised or exempt. Complaints can go to the FOS.